Supporting Local Economic Development is a cornerstone of Chamber’s Pre- Budget Submission
Local Economic Development (LED) is one the four pillars supporting Chamber’s Ireland Pre-Budget submission, the others being:
- Supporting Entrepreneurship and Small Business
- Investing in Physical and Social Infrastructure
- Enhancing the efficiency of our Public Services
Speaking in connection with the Chamber’s Ireland submission, Sligo Chamber CEO Paul Keyes said “It is generally and rightly acknowledged that Local Authorities play the central role in Local Economic Development. Whilst that is the case it remains essential that our Local Authorities are provided with the tools and resources required to exercise that function. While Local Authorities such as Sligo County Council remain constrained in terms of their resource capacity, the increasing level of imbalance within the National economic recovery is set to continue. We urge Government to take a closer look at the funding of Local Authorities generally in order to ensure that the more regional locations are empowered to achieve their economic potential”.
The details of the local economic development submission are outlined below:
1. Match Fund a Portion of Commercial Rates for LED
The role of Local Authorities and local economic actors in advancing the growth of their communities has never been more important. Locally focused actors have always played an integral role in the economic development of their area, but with the ongoing reform of Local Government and the development of Regional Action Plans for Jobs, a renewed emphasis has been placed on Local Authorities and communities as drivers of local economic development.
Drawing on the examples of Cork City and County Councils and international best practice, the establishment of a development fund in each Local Authority can be effectively used to support local enterprises and projects with growth potential. This practice should be incentivised by centrally match funding a portion of the fund.
Development funds could then focus on driving business growth throughout a region by providing supports into targeted projects to enhance the business environment subject to applications detailing stated objectives for each initiative. For example, funds could be utilised to invest in initiatives such as start-ups, festivals and markets, arts/craft studios, start-up hubs, etc.
We suggest that development funds form part of a national local economic development system which with the support of Central Government could be rolled out via Local Authorities across the country.
Incentivise Local Authorities to ring fence a portion of commercial rates for local economic development with matching funding from the Exchequer.
2. Develop State Supported Crowd-Funding Programmes
Similarly, there is scope to develop local microfinance and crowd-funding programmes to fund social investments in local areas.
Across the Atlantic, US Local Authorities already utilise crowd-funding to regenerate local areas and promote the take-up of underused or vacant properties. In San Francisco, for example, the Mayor’s Office of Civic Innovation used a crowd-funding platform to seek inspiration from the public for ideas to put free spaces into use. Businesses or groups were invited to bid to use designated public areas on a temporary basis to showcase innovative projects. Potential partners included non-profits, entrepreneurs, local businesses and community groups.
Closer to home, the opportunities presented by crowd-funding have also been embraced by UK local councils. Faced with budgetary constraints, British councils have turned to crowd-funding platforms to rejuvenate high streets and realise much-needed regeneration projects. Using crowd-funding platforms, Councils can pitch ideas to the local community so that the cost of the project is shared among those who benefit. Councils use this approach to top up available funding from Exchequer funded grants, while others may look for the full cost associated with a project. Successfully funded projects in the UK include a new community centre in South Wales, public art installations in East London, the roll-out of free WiFi in Nottinghamshire, and the conversion of an empty property into an entrepreneur hub in High Wycombe. More information on and inspiration for the range of civic projects which can be achieved using crowd-funding can be found at www.spacehive.com.
In order to trigger and enhance locally focused crowd-funding programmes, some seed capital could be provided from central funds with guidelines as to what types of projects it should support. As an added benefit to local economic development, crowd-funding also facilitates and encourages citizen engagement in local planning and development.
Develop state supported crowd-funding programmes to fund social investments.
3. Support LED through Strategic Public Procurement
Chambers Ireland believes that there is a particular opportunity to facilitate and support local economic development through the strategic application of public procurement processes. While we recognise that there remains an imperative amongst contracting authorities to reduce costs, there are strong arguments for developing more nuanced procurement processes in order to stimulate economic activity and ensure better long term returns for the tax payer. Tenders should be reviewed by their overall benefit to the economy rather than just the upfront price. Local economic development also has the potential to be supported by the inclusion of social clauses in tenders for public contracts. For example, weight could be given to use of local suppliers or providing employment to the long term unemployed. However, while social clauses have the potential to support the local economy and provide social value, Government must make sure it is applied in a way that doesn’t become onerous or disadvantage SMEs.
Although this measure possibly would have a small short-term effect on costs, the impact on local job creation and retention would be greater than any upfront additional expenditure.
Support local economic development through strategic public procurement focusing on the overall benefit to an economy rather than just upfront price.
The full submission can be read here: Chambers Ireland Pre-Budget Submission